Home sales down by 40pc on peak level

House sales have fallen nearly 40 per cent since the peak of the boom five years ago, the Royal Institution of Chartered Surveyors said today.

Just over 15 completed sales were made per surveyor in the three months to May, a 40 per cent drop on about 25 sales made over the same period in 2007.

The West Midlands saw an improvement on other areas in May, with 22 sales per surveyor compared to 23 in 2007, but the recovery remains weak.

The reluctance of many banks to offer people mortgages they can afford is behind the ‘stagnant’ market, RICS said, although it expects sales to pick up over the summer months.

Lenders have been tightening their borrowing criteria amid the weak economy and the Eurozone crisis.

There were 51,823 approvals for house purchase in April worth £7.6 billion, a 1.5 per cent increase on the previous month, but still under the previous six-month average, according to Bank of England figures.

Nine per cent more surveyors in the survey expect to see a rise in transactions in the coming months, although this does not mean prices will also increase.

London, which has had strong demand from overseas buyers, was the only area where more surveyors reported price increases rather than decreases, continuing an ongoing trend.

But Mike Nettleton, director of Telford-based estate agents Nock Deighton, said Shropshire had been relatively successful during the period.

“While the RICS figures announced today do not come as a surprise nationally, we have been slightly insulated from this in Shropshire as we have a number of extremely desirable areas which draw homebuyers from across the country,” he said.

“Since the height of the housing boom, we have certainly seen house prices drop from their peak, however sales in Shropshire are still brisk and properties which are priced realistically are being sold reasonably quickly.”